By Patience Saghana
There is a strong indication that insurance companies in the country may need to tighten their girdle now that the Local Content Development is now a law.
There has been flagrant abuse of the local content Policy of the government during the period it was yet a law. The various authorities concerned will now have a back-up to enforce the law and ensure that the local content policy law is well implemented tot eh benefit of the local market including insurance companies.
Acting President, Dr. Goodluck Jonathan, on Thursday signed the Nigerian Oil and Gas Industry Content Development Bill into law.
Speaking at signing into law of the bill on Thursday last week, Jonathan explained that the new law would promote local participation in the oil and gas industry.
He said, â€œThis bill seeks to address the compelling need for us as a nation to have indigenous participation in the industry.
â€œHence, the Nigerian Oil and Gas Industry Content Development Bill 2010 shall apply to all matters pertaining to Nigerian content in respect of all operations or transactions carried out in or connected with the Nigerian oil and gas industry.â€
Henceforth, according to the Acting President, â€œThere shall be exclusive consideration for Nigerian indigenous service companies, which demonstrate ownership of equipment, Nigerian personnel and capacity to execute jobs in the Nigerian oil and gas industry.â€
The Act provides for the development of the Nigerian content in the oil and gas industry through the content plan, supervision, coordination, monitoring and implementation of Nigerian content and for related matters.â€
Mr Ernest Nwapa is the General Manager in charge of the Nigerian Content Division at the Nigerian National Petroleum Corporation (NNPC) who spoke on the capacity of local companies said, â€œIn terms of capacity building, we talked about the gaps, the problems, the challenge, essentially, the capacity gaps are in four areas; the infrastructure, the facilities in the institutions. But the most important aspect is the human capital because that is where you can transmit to the development of the people and much as the NNPC has always been at the fore, it is not entirely its role to be working doing all the training and using all of its resourcesâ€.
Nwapa, â€œAnother example is the Insurance Act, it is not an NNPC Act, but we took a deliberate step to say that going forward, every contract on insurance, we as NNPC, as a responsible national oil company, we must ensure that our business is carried out in accordance with the laws of the land. And thatâ€™s what we have been doing while waiting for this Nigerian Content Development bill to be passed. In that regard, we have gone through the first phase which we call the diagnostic and foundation phase of the Nigerian Content implementationâ€.
Then, immediately we started getting traction in that area, the next problem arose, where is the capacity to do all of these things? Now youâ€™ve identified the things you want to do in Nigeria to meet governmentâ€™s target, who is going to do it? Where is it going to be done? What quality levels do you have to do these things? That was a very major challenge and that challenge had to be confronted, again, using the model of collaboration
The NNPCâ€™s LCD GM stated, â€œWe have succeeded in doing a status report which identified all the requirements from engineering to well and drilling, to logistics, skills, the area of insurance, banking and other support services in the oil and gas industry.
For every segment of the industry, we have gone to Nigerian companies and yards, identified what they have and what they donâ€™t have. In other words, we know what the demand was and what the supply was and that gap, we had to sit down with people who know both locally and internationally to design initiatives to bridge the gapâ€